Snyder to address road funding

Archive: Wednesday

January 16, 2013

Snyder to address road funding

Just repairing and maintaining roads takes billions

BY JOHN FLESHER Associated Press Wed Jan 16, 2013, 07:14 AM EST

LANSING — Gov. Rick Snyder was preparing Tuesday to ask legislators for billions of dollars to repair Michigan's pothole-riddled roads and aging bridges, a politically delicate task made even tougher by Republicans' aversion to higher taxes and Democrats' fury over last month's contentious lame-duck session.

Transportation infrastructure funding is expected to be among the top priorities in Snyder's annual State of the State address Wednesday.

Even with GOP majorities in both chambers, the Republican governor failed last year to get a new infusion of money — and the task is likely to remain challenging despite widespread agreement that improvements are desperately needed. A bipartisan legislative report last year said the state needs to spend an extra $1.5 billion a year to adequately maintain the system.

Raising motor fuel taxes and vehicle registration fees, the two primary sources of cash for roads, is never popular. Snyder and the entire Legislature are up for re-election in 2014. Even so, advocates for road and bridge improvements say the problem can't be put off any longer.

"Even with the anti-tax environment, there seems to be support by the general public — if they know what their tax dollars are being used for and they can see the potential for improvements to the system, they'll support those increases," said Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, a construction trade group.

Snyder told The Associated Press on Tuesday his proposal will deal with raising additional revenue as well as how the money is distributed. Without providing details, he said he would make the case that generating cash for transportation infrastructure is a long-term investment.

"What we're going to propose is actually a way to save money in my view," he said. "It does cost more dollars but if you look at over a 10- or 20-year timeframe, it actually reduces our cost compared to not doing something."

Few would dispute that Michigan's road network needs rescuing. The Department of Transportation says 13 percent of the pavement on federal and state highways failed to get at least a "fair" rating last year. Many county and municipal roads also are in bad shape.

Between fuel taxes, registration fees and federal support, Michigan raises about $3 billion a year for roads and bridges. Nystrom acknowledged it sounds like a lot of money, but said by the time it's divided among federal and state roads, 83 counties and 531 cities and towns, "it's stretched pretty thin."

As vehicles have become more efficient, people have bought less fuel, which means fewer tax dollars have been funneled toward road maintenance, department spokesman Jeff Cranson said. Additionally, the struggling economy has led people to hold onto their cars and trucks for longer periods. Because registration fees are based on vehicles' value, older cars don't generate as much revenue as newer ones.

State Sen. Roger Kahn, a Saginaw Republican, said he would introduce bills offering a number of options for generating money, including boosting taxes on motor fuels and registration fees. Michigan's motor fuel tax hasn't been raised since 1998, when it jumped from 15 cents per gallon to 19 cents per gallon. The tax on diesel fuel is 15 cents per gallon.

Another possibility is raising the state sales tax and using the extra money to pay for roads and bridges, which could be coupled with eliminating the fuel tax, he said. That would require voter approval in a statewide referendum.

House Speaker Jase Bolger told the AP the Legislature needs to fund road work, but should begin by looking for ways to save money under the existing budget.

"Some people want to immediately talk about an increase in fuel taxes, but Michigan's hardworking taxpayers deserve to have that be the last question we are asking and not the first," he said.

If Snyder proposes higher taxes and fees, he may need Democratic support to win approval. The minority party remains furious over the way Snyder and the GOP majority used the lame-duck session in December to pass bitterly contested bills — particularly "right-to-work" legislation that made it illegal to require non-union workers to pay fees to the unions that negotiate their pay raises.

House Democratic leader Tim Greimel said it left his party "a little leery of trusting" Snyder. Still, he said Democrats "have always stood ready to work in a bipartisan way .... to find solutions."

Local officials also are hoping Snyder will provide more authority to use state money as needed — especially to hire more staff, said Jim Iwanicki, engineer and manager of the Marquette County Road Commission. His department's workforce has dropped from 100 to 45 the past dozen years, he said.

"No matter what the funding level is, you need to provide services like plowing snow and grading gravel roads and mowing the roadsides so you can see the deer," Iwanicki said. "All the things you do to maintain the system depend on having enough employees."